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This is setting up for a rally, expert says

U.S. stocks rallied Thursday, with defensive sectors leading the way, but one pro is watching carefully for a sell signal because he has his eye elsewhere.

"I think we're setting up for a rally outside the United States," Jack Ablin, chief investment officer at BMO Private Bank, said in an interview with "Power Lunch."

"We've had a great move in the United States, but I think now the next leg has to be higher abroad. We'll have to see."

International large cap and emerging markets are "substantially cheaper" than the U.S., with emerging market equities trading at a 50 percent discount to the S&P 500, he said. That's the steepest discount he's seen since 2002, the year that kicked off a decade of emerging markets outperforming the S&P 500 by 230 percent, Ablin noted.

That said, cheap markets can always get cheaper so he's watching for an indication that the markets can gain some traction and move higher.

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As for the U.S. market, Albin said there have been two things holding him in it: the economy and momentum. Since there has been some stumbling in the economy with low oil and the strong dollar affecting earnings, he's watching momentum.

"If the market does break down, rather than look at a buying opportunity to load more S&P 500 stocks, we'll likely look at that as an opportunity to take a profit and move beyond the S&P," he said.

Read MoreShould US investors worry about Europe? Pros debate

Jeff Kilburg, founder and CEO of KKM Financial, said that if investors have an opportunity to take profits right now they should take them. He thinks the market is very susceptible to go lower and touch the 200 day moving average.

"I think you have to take the profit and run and be ready for the next undercurrent coming out of Europe," he said.